Saturday 25 November 2017

Labour: No deal on Aer Lingus until after election

LABOUR Party TDs are digging in their heels despite a ramping up of pressure by Aer Lingus to support its proposed takeover by airline giant IAG.
LABOUR Party TDs are digging in their heels despite a ramping up of pressure by Aer Lingus to support its proposed takeover by airline giant IAG.
Paschal Donohoe

Niall O'Connor and Thomas Molloy

LABOUR Party TDs are digging in their heels despite a ramping up of pressure by Aer Lingus to support its proposed takeover by airline giant IAG.

The Aer Lingus board yesterday claimed the deal would provide a range of benefits for both Ireland and its employees in a move that has added serious momentum to IAG's bid.

Aer Lingus chairman Colm Barrington said the proposal has "compelling commercial logic" and would enhance Ireland's position as a hub for European travel.

Crucially the board said the deal, if accepted, would boost employment in a move that places further pressure on the Government to sell its 25.1pc stake.

Fine Gael ministers are becoming increasingly convinced that a sale of the stake should be "seriously considered" after reassurances surrounding access, connectivity and the Heathrow slots were given this week.

Ministers were left impressed by the performance of IAG chief Willie Walsh, who this week went on a charm offensive in a bid to build support.

But the Irish Independent can reveal that senior Labour figures have ruled out expressing support for the deal until after the general election.

Party strategists believe consenting to a sale of the State's stake prior to the election could severely damage the chances of their Dublin-based TDs.

Significantly though, several Labour sources this week admitted that the party may be willing to lend its support to the deal once the general election takes place.

"It won't happen before then but the mood is certainly changing," a senior source told the Irish Independent.

Central to securing the support of the party is the so-called 'Aer Lingus' seven. The group, which has in recent weeks mounted strong opposition to the deal, is expected to meet again to discuss recent developments surrounding the proposal.

Those involved in the internal party faction include Joe Costello (Dublin Central), John Lyons (Dublin North West), Brendan Ryan (Dublin North), Sean Kenny (Dublin North East), Robert Dowds (Dublin Mid West), Dominic Hannigan (Meath East) and junior minister Aodhan O Riordain (Dublin North Central).

IAG's €1.36bn offer already had the qualified backing of Aer Lingus's board but the airline said it will only issue a formal recommendation if the bid gets the go-ahead from Ryanair and the Government.

Aer Lingus chairman Colm Barrington yesterday gave a long list of reasons why they should back it. He said a takeover "will deliver significant benefits for Aer Lingus, its employees, its customers and for Ireland."

The statement added: "Following a combination with IAG, Aer Lingus will have a markedly greater number of more attractive growth options that will significantly benefit the company, its employees, its customers, the tourism sector, Irish business and industry and the airports at which Aer Lingus operates and Ireland."

The move follows a two-day charm offensive by IAG chief executive Willie Walsh in Dublin which included a three-hour Q&A with politicians concerned at the prospect of a takeover.

Aer Lingus's shares, trading 13pc below the IAG offer price of €2.55 on worries over the political opposition, were 2.2pc lower yesterday at €2.20.

Transport Minister Paschal Donohoe said the matter will continue to be monitored.

"I have had an opportunity to meet with IAG and Aer Lingus this week to engage directly with them," he said.

"I note the statement from Aer Lingus this afternoon and the matter remains under consideration by Government."

Irish Independent

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